ARMED SERVICES PROCUREMENT ACT OF 1947 RDP80R01731R001700170013-6.pdf

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19 November 1951

imaElANDUM FOR

SUBJECT: Armed Services Procurement Act of 1S-U7

1. The sections you inquired about read as follows:

"Sec. 2(c) All purchases and contracts for supplier,
and services shall be made by advertising* as provi-ded
in section 3* except that such purchases and contracts
may be negotiated by the agency head without advertising
if —

• • •

(12) for supplies or services as to which the agency
head determines that the character, ingredients,
or components thereof are such that the purchase
or contract shoulu not be publicly disclosed;

(13) for supplies or services as to which the agency
head determines that the bid prices after adver-
tising therefor are not reasonable or have not
been independently' arrived at in open competition;
Provided, Than no negotiated purchase or contra*",
may be entered into under this paragraph after
the rejection of all bids received unless (a)
notification of the intention to negotiate and
reasonable opportunity to negotiate shall have
been given by the agency head to each responsi-
ble binder, (B) the negotiated price is loorer
than the lowest rejected bid price of a responsi-
ble bidder as determined by the agency head, ana
(C) such negotiated price is the lowest negoti-
ated price offered by any responsible supplier:..."

"Sec. 5(a) The agency head may make advance payments uncajr
negotiated contracts heretofore or hereafter executed in
any amount not exceeding the contract price upon sucu terns
as the parties shall agrees Provided, That advance pay-
ments shall be made only upon adequate security and if tue
agency head determines that provision for such advance
payments is in the public interest or in the interest of
the national defense and is necessary and appropriate in
order to procure required supplies or services under uhu
contract.

CONFIDENTIAL

SECURITY iNiCnMA.iQH

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S-.wrfi!Y INFORMAiiON

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FOIAB5

2. These requirements have caused little difficulty to date, out
we have recently considered with procurement whether we need any l< sis-
lative changes. At present it appears that we have sufficient freedom
to do what we need without unnecessary administrative burdens. As you
probably know, the above provisions apply only to contracts on voucher**
funds, subject to GAO review. These contracts may be classified or un-
classified.

GC/ERH/McD

.LAWRENCE k. HOUSTOK
General Counsel

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